NCAA's decision could have huge impact on Kentucky's economy

Posted
Thursday, September 28, 2017 12:37 pm

The losses would go from high-paying jobs to the lower-level positions, from financial executives to ticket-takers, nobody would be exempt, but it would be significant and a significant hit on Kentucky’s economy. Because of what it would do to the hard-working people of Louisville – and to the rest of the state – let’s hope the punishment doesn’t come to a total shutdown of basketball.”

College basketball’s most valuable team, according to Forbes, is the University of Louisville.

In May of 2016, Forbes reported that Louisville’s financial value rose 19 percent to $45.5 million. Louisville has been among college basketball’s three most lucrative teams since Forbes started the ranking in 2008.

Louisville’s dominance on the list began in 2011 with the Cardinals starting to play home games at the KFC Yum! Center, which features 72 luxury suites.

Those suites are rented for a price range approaching $100,000 each. That's more than $6 million in rent and only 12 percent goes to the arena. Add onto that the price of tickets, the donation required to purchase the tickets, food and drinks, and the number starts escalating quickly.

Big-time college athletics is big business. College athletics data gathered by the U.S. Department of Education a few years ago showed UofL’s Athletic Department budget as being almost twice as much as the Louisville Fire Department's.

So what happens if the NCAA lowers the boom on Louisville and shuts down the program for a year because of “aggravating factors,” a move previously known as the death penalty?

The NCAA has a right to take away a repeat-violator program’s right to compete for at least a year. The last time it happened to a Division I athletics program was Southern Methodist football in February 1987.

The use of the term “death penalty” has been phased out of the NCAA’s bylaws in recent years, replaced by “aggravating factors.”

The earlier UofL basketball recruiting scandal, involving strippers and prostitutes with potential recruits, would count as an aggravating factor, according to the first guideline: “Multiple Level I violations by the institution or involved individual.”

Here is what the bylaw says: “An aggravated case is one in which aggravating factors for a party outweigh mitigating factors for that party. A case should not be classified as aggravated solely because the number of aggravating factors is larger than the number of mitigating factors. An egregious aggravating factor may outweigh multiple mitigating factors.”

If a program already facing sanctions commit another major infraction, that would qualify as an aggravating factor, and could lead to more severe punishments than it would have otherwise faced.

Based on those factors, it would appear the NCAA has a right to take down Louisville’s basketball program.

If that happens, the punishment will reverberate throughout the city of Louisville – and the state of Kentucky for that matter – for years to come. Imagine the flow of money coming from college basketball’s most valuable teams for the past five years totally drying up for a year. How many jobs would be lost because of that punishment? How many lives changed? It would catastrophic.

The losses would go from high-paying jobs to the lower-level positions, from financial executives to ticket-takers. Nobody would be exempt. It would be a significant hit on Kentucky’s economy.

Because of what it would do to the hard-working people of Louisville – and to the rest of the state – let’s hope the punishment doesn’t come to a total shutdown of basketball.

Louisville’s basketball program will have a reboot no matter what happens with the NCAA. But it can still be an economic driver if it’s in operation.

Last year, Louisville generated $5 million for the conference from its tournament success, second behind only Kentucky. Since conference distributions are based on tourney performances over the previous six years, the Atlantic Coast Conference will feel the sting of this year’s self-imposed ban for years to come.

Let’s hope the city of Louisville and our state don’t feel the brunt of the basketball program’s missteps as well.

As chairman of the House Energy and Natural Resources Committee for more than 19 years, I have seen both the highs and lows of energy policy in Kentucky. I chaired the committee when coal production was at its all-time peak in Kentucky, and I fought the federal government as it tried to take down one of Kentucky’s signature industries.